Phone giant Xiaomi jumps to two-year high after better-than-expected profit

Xiaomi Corp.’s shares leapt 11.4% after inroads into the Chinese market for high-end smartphones and strong growth overseas helped the company report better-than-expected profit.

The stock climbed its most in two years in Hong Kong, taking its 2020 gains to 98%. The Chinese smartphone maker more than doubled net income to 4.49 billion yuan ($716 million) in the June quarter, beating the highest analyst estimate. Sales increased 3.1% to 53.5 billion yuan. Xiaomi’s overseas business has recovered to pre-Covid-19 levels, acting Chief Financial Officer Wang Xiang said Wednesday.

“Driven by a favorable competitive landscape, aggressive building of sales channels, increased R&D with strong product competitiveness, and continued adoption of 5G in China and overseas market (Europe) in 2021, we expect strong value share gains starting 2H20,” Bocom International analysts including Chris Yim wrote in a report. Bocom, Morgan Stanley, CICC and Citigroup were among brokerages that lifted their price targets for Xiaomi’s stock.